Here's my summary of the key overnight news in 90 seconds at 9 am, including news of a gigantic offer to settle legal woes.
In the US, durable goods orders for August came in above expectations and above the previous month, although the capital goods component wasn't so strong. At the same time US new home sales rose strongly to the level that was expected in August.
On Wall Street, the talk is of bank JPMorgan trying to clear up all its outstanding legal issues with regulators. Depending on reports, they may be offering anywhere from US$3 to US$7 billion to resolve matters (buy their way out). In this range, these fines would dwarf any previous settlement and indicate the depth of the bank's legal tangles.
Overnight, the American debt ceiling cliff got put back a couple of weeks with the US Treasury putting a date on when the cash will run out: October 17. But there is also talk that as a second term President, Obama may test the use of an obscure clause in their Constitution (the 14th Amendment), raise the ceiling himself, and put it on the Courts to rule. Such a move would anger many legislators and it is uncertain how the American public would react.
Speaking of debt, in Europe, France has revealed that its public debt will hit more than 95% of GDP in 2014, according to their latest budget plan.
In Australia, reports are emerging that their chilled beef exports to China are being blocked. Australia is by far the largest supplier to China, and some there suspect the 'safety issues' are a non-tariff attempt to aid local Chinese producers. There may be spin-off impacts for New Zealand. Something to watch, and comes on the back of a block on NZ apples into China.
Sensitivity to China will be what is behind Fonterra's remarks yesterday that the price of milk power is too high and needs to be normalised.
And speaking of sensitivity, Finance minister Bill English has kept up his attack on ASB and its withdrawal of mortgage pre-approvals. Expect the government to launch (or re-launch) an initiative to help first home buyers, probably in early October.
Markets are drifting ahead of the US debt crisis and government shutdown date. Equities are down; the Dow is down marginally in late trade. Oil is down again, now close to US$102/barrel, gold is marginally higher, and UST 10yr yields are down again, now at 2.64%.
The NZ dollar starts today lower at 82.5 USc, 88.1 AUc, and the TWI is at 76.8.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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10 Comments
Americans are not popularly know for the use of irony, but I have been enjoying the "Trading as a result of the Fed's tapering decision happened faster than the speed of light" story over the past few days.
http://www.motherjones.com/kevin-drum/2013/09/somebody-stole-7-millisec…
Hard to know....its a high tech sport and we are up there leading....both finalists are substantially NZ....
How much have NZ boatbuilders earned/gained since we first won?
How much tax paid?
How many NZ advantagious deals have been done in the last few weeks?
What has been the benefit of NZ being out there on the world map for tourism?
The Rugby world cup was really blah, little gain for that year let alone a decade of gains....this? I'd be inclined to go with supporting the next challenge myself.
regards
This cybercrime/ identity theft story deserves to be huge, but I suspect most people don't want to think about the implications
http://krebsonsecurity.com/2013/09/data-broker-giants-hacked-by-id-thef…
It mentions in that article that it may be the underlying weakness in the economy that stopped the FED from tapering...
I'm guessing it might also be for the Financial sector .. Maybe they thought the Bond mkt would implode.... Maybe they are giving that mkt time to unwind..???
One of my Favorite economists has said this :
the official explanation for generationally low nominal bond yields is deeply flawed – The demand for bonds that has driven down yields is the product of bond market leverage, positive yield curve carry and forward guidance on policy interest rates, rather than a glut of global savings. Every attempt to tighten monetary policy is likely to be profoundly disruptive to bond yields in 2013.
Seems JP Morgan execs are happy to offer billions of the companies money to get them off the hook. Of course they would .
What might really change the behaviours of these characters is the regulators saying 'no settlement'
If these characters saw their peers being led away in handcuffs for a long incarceration - then we would see them snap to attention for sure.
No chance while the officers of these companies are leading the charge to rid society of the last vestiges of socialism for the masses.
Matt Taibbi's most recent rant calls it as it is:
Imagine the effect on our culture, particularly on the young, if the kind of fame and adulation bathing Lady Gaga attached to the more notable achievements of say, Warren Buffett. Or if the moral praise showered on Mother Teresa went to someone like Lloyd Blankfein, who, in guiding Goldman Sachs toward billions in profits, has done infinitely more for mankind. (Since profit is the market value of the product minus the market value of factors used, profit represents the value created.)
Instead, we live in a culture where Goldman Sachs is smeared as "a great vampire squid wrapped around the face of humanity. . ."
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